SoftBank’s Son poised for another IPO windfall

Son (pic) started last year under a cloud after the meltdown at WeWork, then saw his shares plunge with the coronavirus pandemic and a loss of almost US$18bil at SoftBank’s Vision Fund.

TOKYO: SoftBank Group Corp is preparing to take at least six more of its portfolio companies public this year, building on a 2020 turnaround that pushed the value of Masayoshi Son’s (pic) technology conglomerate to the highest since the dot-com boom.

Among the startups heading for initial public offerings (IPOs) are South Korean e-commerce pioneer Coupang Corp, Indonesian online mall operator PT Tokopedia and China’s ride-hailing giant Didi Chuxing, according to people familiar with the matter, asking not to be named because the matter is private. The IPOs could give Son another round of enormous gains after successful offerings from DoorDash Inc and KE Holdings Inc in 2020.

Son (pic) started last year under a cloud after the meltdown at WeWork, then saw his shares plunge with the coronavirus pandemic and a loss of almost US$18bil at SoftBank’s Vision Fund.

But the Japanese billionaire, long reluctant to cash out of investments like Alibaba Group Holding Ltd, embarked on an uncharacteristic sales blitz, raising more than US$50bil by shedding stakes in Alibaba, T-Mobile US Inc and its domestic wireless affiliate, SoftBank Corp. He used the cash to buy back his own shares, pushing SoftBank Group’s stock to the highest level since 2000.

If demand for IPOs continues to be robust, it would improve the prospects for the remaining 100 or so startups in SoftBank’s portfolio. That would give Son more liquid assets to keep funding buybacks – or perhaps take his company private.

“That old concern about them not being willing to monetise assets is largely in the past, ” said Justin Tang, head of Asian research at United First Partners in Singapore. “Son has successfully shed the WeWork stigma and no one talks about that anymore. The story is now about further investment exits and prospects for privatisation.”

Even for a man whose career has been filled with epic success and failure, Son’s 2020 was unusually dramatic. In the span of a few months, SoftBank lost half its value in a pandemic-driven rout, reported the largest loss in its history and then recovered to record profits and a surging valuation.

Son was rescued, at least in part, by the speculative frenzy sweeping global markets. Energised by the fervour, Japan’s most famous financier agreed to sell chip designer Arm in the largest deal of his career, tried his hand at trading stock options and flirted with taking his company private. Now, the Vision Fund is on track to report its second quarter of record profits and SoftBank is raising US$525mil through a blank-check company.

The outbreak has had an uneven impact on Son’s startups. With many people sheltering at home, SoftBank took large writedowns on the value of office-sharing giant WeWork and hotel-booking service Oyo Hotels & Homes. At the same time, e-commerce and food-delivery companies have seen their prospects brighten.

Tokopedia may be the closest to a market debut. Indonesia’s largest online mall last month hired advisers, saying it is considering options for a public debut. The company is in talks to merge with ride-hailing provider Gojek ahead of an IPO of the combined entity and, separately, has discussed going public by combining with the special purpose acquisition company Bridgetown Holdings Ltd.

In either scenario, Tokopedia could be valued at about US$10bil. SoftBank’s Vision Fund owns about a quarter of the company, a stake it acquired for less than US$1bil, one of the people said.

Coupang’s IPO could come in the second quarter of this year and may value the South Korean e-commerce giant at over US$30bil, according to people familiar with the matter. The Vision Fund paid US$2.7bil to acquire its 37% stake in the company, most of it at a US$9bil post-money valuation, the person said.

India’s Policybazaar is also considering a listing that may value the online insurance platform at over US$3.5bil. SoftBank invested about US$200mil in the company at US$1.5bil pre-money valuation and owns around 15%, the person said. Auto1 Group GmbH is looking to raise €1bil (US$1.2bil) in an offering that would value the German used car retailer at over US$6bil. — Bloomberg

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